CTL Strategies ranked in Chambers Global Guide 2024
CTL Strategies has been ranked in the Chambers Global Guide 2024, published by Chambers and Partners.
The new edition of the Global Guide highlighted CTL for its considerable market respect in tax matters, and demonstrating strength in litigation and corporate services. Among responses received from interviewees, Chamber and Partners quoted that the firm is “able to handle complex matters and provide unbiased legal advice.”
Chambers and Partners is an independent research firm that operates in 200 jurisdictions and is commonly referred to as the “gold standard” in the legal profession. Chambers and Partners publishes rankings and information on the world’s top lawyers and law firms. In-depth interviews with lawyers, in-house counsel for clients, and independent experts were used to compile the rankings.
Proposed Amendment to Tax Administration Act Raises Payment Requirements for Tax Appeals
The Government has submitted a Bill to amend the Tax Administration Act1, proposing significant changes to the amount of tax required to be paid by taxpayers prior to filing an appeal at the Tax Appeal Tribunal
Under the current framework, a taxpayer appealing to a tax assessment made by MIRA under section 39 of the Tax Administration Act is required to pay 25% of the amount in dispute before filing an appeal. The Bill proposes to increase this requirement to 50% of the disputed amount. As currently practiced, this percentage would be calculated on the amount in dispute, excluding any related fines or interest.
In addition to doubling the general amount of tax that must be paid before proceeding with an appeal, the Bill also proposes that 100% of the disputed tax amount must be paid before appealing to the Tax Appeal Tribunal where the assessment relates to any of the following types of transactions:
If enacted, these amendments would materially raise the financial threshold for taxpayers seeking to challenge MIRA assessments before the Tax Appeal Tribunal. The effect would be particularly significant for transfer pricing and other assessments falling within the proposed 100% payment categories, as taxpayers would be required to settle the full amount in dispute before lodging an appeal to the Tax Appeal Tribunal.
The above proposed changes will only take effect once the Bill is passed by the People’s Majlis, ratified by the President and published in the Government Gazette.
Government Submits Bill to Tighten Thin Capitalisation Rules
The Government submitted a bill to the People’s Majlis on 18 October 2026 proposing the Third Amendment to the Income Tax Act 4. The Bill only amends Section 71, the thin capitalisation rule. If passed, the amendments will take effect from 1 January 2027 and apply in computing taxable income for the 2027 tax year onwards.
The bill makes two key changes to thin capitalisation rule. First, it reduces interest capacity from 30% to 25% of tax-EBITDA returning to the cap that applied when MIRA first introduced the rule by tax ruling in 2018. Second, it repeals the current mechanism that lets interest above interest capacity be carried forward and deducted in later periods for up to 10 years. As a result, interest disallowed under the thin capitalisation rule would be permanently forfeited rather than just deferred. The scope of the rule is unchanged, so interest paid to foreign banks and financial institutions remains within it; only interest paid to banks and certain financial institutions licensed in the Maldives is excluded.
The Ministry of Finance’s estimate accompanying the bill projects around MVR 496 million in additional income tax revenue in the first 12 months, based on 2025 tax return data.
The impact would be greatest on large, debt-financed developments, such as resorts financed with offshore borrowing. During construction and the pre-opening, these projects usually generate little or no tax-EBITDA and in their early operating years interest costs are typically high relative to earnings. Under the current rules, interest disallowed in those years can be deducted as the business matures, within the 10 year limit. Under the proposed rules, it would be permanently lost, leaving these businesses unable to deduct a significant part of their actual financing costs. This raises the effective tax burden on long-term investments at the stage when they are most financially vulnerable.
The bill also contains no transitional provision for interest already carried forward at 31 December 2026. Once the carry-forward provisions are repealed, these accumulated balances may become permanently non-deductible, which would also penalise businesses for interest they incurred under the existing rules.